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Janet L. Yellen appeared February 24th before the Senate Committee on Banking, Housing, and Urban Affairs and again February 25th, 2015 before the House Committee on Financial Services, providing semi-annual testimony on monetary policy and the economy in her role as the U.S. Federal Reserve Chair. What We Learned About Employment The unemployment rate (U3) [...]

A persistent bull market, in part, has resulted in hedge fund performance falling short of the broader market. Colloquial wisdom suggests that investors have the potential to earn superior returns and enjoy lower fees by investing in mutual funds. In short, many outside observers believe investors are not getting what they paid for—it’s like going [...]

Hedge fund managers are nothing if not innovative. Take Davide Erro, chief investment officer of the Hong Kong-based Turiya Advisors Asia, who delighted his investors by returning 17.5% of their capital investment. Turiya further pleased investors by returning north of 20% through the first 11 months of 2014. Erro reasoned that Turiya was growing at [...]

Record breaking index growth (e.g. the S&P 500’s positive percentage change stood at 11.39%) in the year ending 2014, highlighted a comparatively lackluster year for hedge fund performance, which, on average, showed modest gains averaging around 3.5%. Despite a less than banner year in terms of returns, a Pyramis Global Survey suggested that only one-third [...]

Several significant challenges confront the industry as 2014 draws its last breaths, not the least of which is the trend away from traditional 2 and 20 fee structures. Fee Structures No single event brought this into clearer focus than the CalPERS’ $4 billion redemption in hedge fund investments announced earlier this year. CalPERS cited high [...]

Hedge funds have long been the funambulists and contortionists of the circus that we call the financial sector. It was not so long ago that hedge funds pushed into real estate, purchasing thousands of single family homes in selected markets. Recently, the hedge fund industry has, once again, revealed its nimble nature by investing in [...]

Joseph B. Galbraith, former principal of Florida hedge fund Galbraith Capital Investment Management Corp., has made the rogue’s list, subsequent to his apparent refusal to return $1.483 million mistakenly deposited in one of his firm’s accounts by an arguably incompetent Credit Suisse Securities (USA) LLC. The aggregate $1.483 million consisted of three wire-transfers made to an [...]

A debate brews between the U.S. Security and Exchange Commission (SEC) and the hedge fund industry about proposed changes to the current definition of accredited investor. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires this definition be reviewed every four years. The definition of an accredited investor has not changed since 1982, except [...]

Every action has consequences. The CalPERS divestiture will have some unanticipated consequences as well. Here are a few. Doors that May Have Closed Two and twenty was already on the rails and headed out of town before the CalPERS announcement. One of the industry’s worst kept secrets is that most large pension funds and institutional [...]

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